Starbucks expansion growing rapidly in Asian region
2023.02.16 09:34
Starbucks expansion growing rapidly in Asian region
By Ray Johnson
Budrigannews.com – In 2023, Starbucks will expand its presence in Asia-Pacific to more than 400 locations, marking the company’s largest expansion in five years.
The coffee chain intends to open new locations outside of major cities in India, Indonesia, Thailand, Malaysia, Laos, and the Philippines. According to a statement released on Thursday, the company will open one location in Laos, a Southeast Asian market that it only entered last year.
According to Starbucks’ president of international and channel development, Michael Conway, the move is meant to capitalize on Asia’s reopening as it continues to recover from the Covid-19 crisis.
He stated in the statement, “We are seeing headwinds shifting to tailwinds across markets around the world, including the Asia Pacific region, and continued recovery from the pandemic.”
“We remain optimistic about its long-term growth and opportunities, supported by a growing middle class and rising coffee consumption,” according to Starbucks. “The Asia-Pacific region will continue to be a key growth driver for Starbucks globally.”
One of the biggest growth opportunities for the beverage giant is Asia Pacific, which Starbucks (SBUX) manages independently of its operations in mainland China and Japan.
Mainland China is the chain’s fastest-growing market, despite recent difficulties in its operations there.
In an earnings presentation earlier this month, the company stated that same-store sales in China decreased by 29% in the three months prior to January 1. The metric is based on sales at stores that have been open for at least 13 months.
During that time, Starbucks’ interim CEO Howard Schultz cited “Covid-related headwinds that unfolded in China.”
Conway stated during the presentation that Asia Pacific’s revenue increased by more than 20% year-over-year, highlighting the company’s other locations as bright spots during the quarter.
He stated to analysts, “Our markets outside of China performed even better than we thought.”
Starbucks wants to change the layout of some of its stores as it expands its reach.
The company highlighted one of its newest locations, a drive-thru, in its statement on Thursday. The drive-thru opened last month in South Korea, bringing the total number of its stores in the region to 5,000.
According to Emmy Kan, the president of the company in Asia Pacific, drive-thrus are gaining popularity as customers seek greater convenience.
This year, Starbucks plans to open more than 100 stores of this kind in the region, bringing its total to more than 700.
Customers can now reserve private rooms for events at some of these establishments. Last year, the company started a similar project in China.
